Canada’s banks raise prime rate to 3%

With the Bank of Canada raising its benchmark interest rate 25 basis points to 1% Wednesday morning, Canada’s major banks are now following suit.

Canada’s six largest banks, TD Bank Financial Group, RBC Royal Bank, Canadian Imperial Bank of Commerce, BMO Bank of Montreal, the Bank of Nova Scotia and National Bank, have all raised their prime lending rates by the same 25 basis points to 3%.

Smaller banks including Desjardins Group and Laurentian Bank have also raised their prime rates by the same amount, to 3%.

There was some uncertainty among analysts prior to BoC governor Mark Carney’s decision early Wednesday, owing to the slowing Canadian economy and the more serious economic difficulties faced by the United States.

Canada’s banks tend to move tightly in concert following a rate change at the Bank of Canada.